Politics of Poverty

Trump’s foreign aid cuts bring us back to the Bush era, huh? Think again.

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Copy of President Trump's skinny budget displayed at the Government Printing Office in Washington Thursday, March 16, 2017. (Photo: AP / J. Scott Applewhite)

Recent claims that the cuts might not be devastating warrant a closer look.

In the weeks since the Trump administration released its budget proposal – complete with shocking cuts to the foreign affairs budget – the Heritage Foundation is poo-pooing the cuts as a simple return to the aid and diplomacy spending levels we had under President George W. Bush.

Is that really true? Did the US international affairs budget balloon so much under President Obama that it would take a 31 percent cut to get us back to Bush-era spending? I wanted to know.

The Heritage Foundation suggests that the cuts are simply a return to a “normal” budget under a Republican president.  Setting aside the fact that the world is different now than it was when Bush left office, and the challenges for US foreign aid include the worst humanitarian crisis since the end of the Second World War, there are a few critical pieces missing.

The first: Inflation.  The numbers used by Heritage don’t account for inflation – both in the 2006-2008 budget years they cite and over time. It has been over eight years since President Bush left office and 10 years since the Republicans controlled both Congress and the White House so simply using the unaltered 2006-08 budget figures is a misrepresentation of the purchasing power of those figures. A dollar in 2006 could buy more than it can today.

A more accurate calculation would account for inflation using the annual inflation rates and include all supplemental and emergency funding from those years. As you can see in the table below, when you compare the adjusted numbers to the most recent appropriations bill from 2016, it would take (at most) an 18 percent cut, or $9.65 billion, to take us back to 2006 spending levels or an 8 percent cut ($4.46 billion) to return to Bush’s last full budget in 2008 – not a 31 percent cut as Heritage suggests.

Note: To return to the nominal (non-inflation adjusted) 2008 budget it would take a 19% cut.

That difference between actually going back to the Bush budget and the cuts Trump has proposed isn’t chump change. It matters.  Those dollars can save a lot of lives, provide nutrition and emergency assistance to people in dire need, ensure girls are able to go to school, help lift people and nations out of poverty, and strengthen governments and local institutions to be able to be self-sufficient in the long-run.  All while making the world a safer place for everyone and creating new markets. The cuts the Trump administration has proposed are unwise and they will undoubtedly have dire effects on many.

Second: Overall foreign aid spending didn’t change much under President Obama. If the proposed cuts are based on a view that foreign aid got out of hand under President Obama, and the US was just making it rain hundred dollar bills everywhere but at home, this couldn’t be further from the truth.  While the US is the largest bilateral donor in terms of overall amount, when you look at how much the US dedicates to foreign assistance compared to the size of its economy, it doesn’t even make the top 20. Not only does the US dedicate less than 1 percent of the federal budget to foreign assistance, if we adjust for inflation (or, frankly, even if we don’t) what the United States provides in Official Development Assistance has declined since President Bush was in office in 2008. That year, the US provided $31.27 billion dollars ($35.13 billion when adjusted for inflation), compared to $29.99 billion in 2015 (the last year of available data for the Obama administration). That said, some areas did receive more funding under President Obama.  Health and HIV/AIDS funding grew significantly, for example, in what is essentially a continuation of President Bush’s PEPFAR legacy, while other sectors saw reductions.

It’s a nice talking point to say that we’re just going back to the budget of the Bush years, but a closer look at the numbers doesn’t bear that out. The reductions we’re up against are much more serious, and could have terrible effects on millions living in poverty around the world, not to mention core ideals of our nation – all to save a fraction of a penny on the federal dollar.

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